MHR 423 - Midterm 2 EXAM QUESTIONS WITH 100% CORRECT ANSWERS| LATEST UPDATE
100% VERIFIED
Restructuring types:
1 ) down-__________
2) down-_________ restructure, sizing, scoping
____________ = A reduction in the number of a firm's employees and assets, sometimes in the
number of its operating units
*may or may not change the composition of businesses in the firm's portfolio
Typical reasons for downsizing:
- Expectation of improved ________ from cost reductions
- Desire or necessity for more efficient operations downsizing, profitability
___________ = a divestiture, spin-off or other means of eliminating businesses unrelated to a
firm's core businesses.
*a.k.a. a set of actions that causes a firm to strategically refocus on its core businesses
- May be accompanied by downsizing, but NOT the elimination of key _________ from its
primary businesses
- Results in a smaller firm that can be more effectively managed by the top management team
Think: LEGO downscoping, employees
,The _________ of a corporate strategy is assessed by the degree to which the businesses are
worth more under the current owners and associated management of the company than they
would under any other ownership (including as independent units). value
A ___________ is the creation of an independent company through the sale or distribution of
new shares of an existing business or division of a parent company
example: FIAT and Ferrari spinoff
Economies of _____ = achieved through resource sharing or transfer
*Where producing product 1 and product 2 TOGETHER decreases the joint cost of production
Resource sharing vs. transfer:
________ = when resources have capacity to get consumed (e.g. production lines, raw
materials)
________ = when resources are intangible (e.g. brand, policies, etc.) scope, sharing, transfer
_______ _______ exists when a firm is able to sell its product above the existing competitive
level or to reduce the costs of its primary and support activities below competitive levels
market power
Types of controls:
_________ controls: objective output measures (e.g. return on assets, sales growth,...)
*Used in mature industries
, ___________ controls: evaluation of managers' decisions and actions
*used in high uncertainty, high tech industries financial, operational
An example of economies of _______ is producing iPads and iPhones on the same production
line. scope
Microtech class activity:
(two managers from different divisions negotiating a transfer price of chip technology)
What were three critical factors causing value to be left on the table in this activity?
1) Managerial _____ interest
2) Not all affected players were ______ in the decision making process
3) _______/asymmetric information used to make the decision
What are possible solutions/ways to encourage cooperation?
1) _______ (e.g. cross functional teams)
2) _______ (e.g. reporting, measurement)
3) _______ (e.g. profit, earnout/benefits based on future value created)
4) _________ (socialization, culture, etc.) self, included, imperfect, structure, controls,
rewards, people
Vertical Integration tradeoffs:
Benefits:
- securing sources of supply of _____ __________
- securing _______ channels
100% VERIFIED
Restructuring types:
1 ) down-__________
2) down-_________ restructure, sizing, scoping
____________ = A reduction in the number of a firm's employees and assets, sometimes in the
number of its operating units
*may or may not change the composition of businesses in the firm's portfolio
Typical reasons for downsizing:
- Expectation of improved ________ from cost reductions
- Desire or necessity for more efficient operations downsizing, profitability
___________ = a divestiture, spin-off or other means of eliminating businesses unrelated to a
firm's core businesses.
*a.k.a. a set of actions that causes a firm to strategically refocus on its core businesses
- May be accompanied by downsizing, but NOT the elimination of key _________ from its
primary businesses
- Results in a smaller firm that can be more effectively managed by the top management team
Think: LEGO downscoping, employees
,The _________ of a corporate strategy is assessed by the degree to which the businesses are
worth more under the current owners and associated management of the company than they
would under any other ownership (including as independent units). value
A ___________ is the creation of an independent company through the sale or distribution of
new shares of an existing business or division of a parent company
example: FIAT and Ferrari spinoff
Economies of _____ = achieved through resource sharing or transfer
*Where producing product 1 and product 2 TOGETHER decreases the joint cost of production
Resource sharing vs. transfer:
________ = when resources have capacity to get consumed (e.g. production lines, raw
materials)
________ = when resources are intangible (e.g. brand, policies, etc.) scope, sharing, transfer
_______ _______ exists when a firm is able to sell its product above the existing competitive
level or to reduce the costs of its primary and support activities below competitive levels
market power
Types of controls:
_________ controls: objective output measures (e.g. return on assets, sales growth,...)
*Used in mature industries
, ___________ controls: evaluation of managers' decisions and actions
*used in high uncertainty, high tech industries financial, operational
An example of economies of _______ is producing iPads and iPhones on the same production
line. scope
Microtech class activity:
(two managers from different divisions negotiating a transfer price of chip technology)
What were three critical factors causing value to be left on the table in this activity?
1) Managerial _____ interest
2) Not all affected players were ______ in the decision making process
3) _______/asymmetric information used to make the decision
What are possible solutions/ways to encourage cooperation?
1) _______ (e.g. cross functional teams)
2) _______ (e.g. reporting, measurement)
3) _______ (e.g. profit, earnout/benefits based on future value created)
4) _________ (socialization, culture, etc.) self, included, imperfect, structure, controls,
rewards, people
Vertical Integration tradeoffs:
Benefits:
- securing sources of supply of _____ __________
- securing _______ channels
